Let’s drive back to D.C. for some more bailout money

Just when we turned the focus correctly towards banks and the bailout, there is new reason to shift some attention to the auto makers again.  Yes, we all thought that they had taken their billions and gone away for a while, but we were all day-dreaming.  They are back requesting another $22 billion.

As some opponents of the domestic auto industry bailout correctly predicted, the auto makers are back again with their hands out.  Mr. Obama, get your pen out again.

An article out today on One News Now quotes a senior fellow at the Heritage Foundation, who believes that ‘the bailout parade is just getting started.’  James Gattuso stated that the carmakers were not only asking for a second round of subsidies, but ‘they indicated in their materials that there very likely will be rounds after that.’

The bailout of the Big 3 is akin to taking blood thinner and then getting a bad cut. We may have learned a valuable lesson, but it’s too late for a quick fix.

All parties in the auto bailout have to sacrifice

According to the One News Now article, Gattuso sees it this way; GM and Chrysler’s restructuring plans contain two major problems — the UAW is still resisting across the board pay cuts down to industry-standard levels; and bondholders and stockholders “still have not taken full haircuts yet.”

Despite the bailout funds, the auto industry has had to make massive lay-offs to meet the terms of the government plan.  With auto sales down across the board, and even the Japanese automakers experiencing rare profit losses and large lay-offs, the outlook for the Detroit auto companies is not good.

Gattuso, who specializes in regulatory policy at Heritage, believes that the only successful method of assuring needed change at the automakers is bankruptcy.  Without any forced reorganization, that involves all interested parties, the domestic automakers will likely be back to Washington on a recurring basis.